Which of the Following Statements Is Most Correct

question 17

Multiple Choice

Which of the following statements is most correct?

• A)An increase in a firm's debt ratio, with no changes in its sales and operating costs, could be expected to lower its profit margin on sales.
• B)An increase in DSO, other things held constant, would generally lead to an increase in the total asset turnover ratio.
• C)An increase on the DSO, other things held constant, would generally lead to an increase in the ROE.
• D)In a competitive economy, where all firms earn similar returns on equity, one would expect to find lower profit margins for airlines, which require a lot of fixed assets relative to sales, than for fresh fish markets.
• E)It is more important to adjust the Debt/Asset ratio than the inventory turnover ratio to account for seasonal fluctuations.

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Definitions:

Cerebral Cortex

The outer layer of the cerebrum in the mammalian brain, involved in higher brain functions such as thought, memory, and decision-making.

Frontal Lobe

The part of the brain located at the front of each cerebral hemisphere, responsible for decision making, problem solving, and controlling behavior.

Personality

The combination of characteristics or qualities that form an individual's distinctive character, influencing thoughts, feelings, and behaviors.

Mining Accident

An accident that occurs during the process of mining minerals, which can result in injuries, fatalities, and environmental damage.